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February 25, 2018

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Crypto Market Commentary

Market under pressure

But Bullish signals are emerging

 

Let’s talk about the word catharsis.

Wikipedia has the best definition that really captures what the word means: Catharsis (from Greek κάθαρσις katharsis meaning “purification” or “cleansing”) is the purification and purgation of emotions—particularly pity and fear—through art or any extreme change in emotion that results in renewal and restoration.

That’s exactly what a correction entails.

The correction from our all time high this year of 830 Billion to our yearly low of 279 Billion was cathartic. Our correction this week which virtually wiped clean all the gains we made over the last two weeks was cathartic. There’s an importance here you might not be seeing. Last Sunday and the Sunday before that the trading volume was 23 Billion and 21 Billion USD, respectively. So far today the volume is 14 Billion and falling. We haven’t seen volume this low since November, and that’s important.

Other than being slightly higher in total market capitalization, market conditions are similar to what we saw on December 1st, 2017, but it’s also different this time.  

We’ve been in a correction for nearly two months now. The slow bleed has had the effect it needed to. The euphoria that gripped the market has been replaced with caution, and that’s extremely healthy. Another point giving us confidence is that 46% of last year’s ICOs have already failed, despite raising over $104 Million.

Some may claim that with so many broken promises, so much investor money squandered, and so many abandoned projects that crypto investing is riskier than ever.

However, that’s a ridiculous position to take. In the established tech world (which has seen its own bubble) 75% of venture-backed companies fail. Across the board, 20% of small businesses fail in their first year, and only 30% will make it to their tenth year.

The lesson here is that starting a business is hard, especially within an evolving sector that no one knows the potential of currently. We think the 46% rate will be 90% before long, and while we could lament the number of ICOs that failed, we’re much more interested in the ones that succeed.

Remember that when the DotCom Bubble popped, many of the tech startups of the day did not make it, but those that did went on to be Google and Amazon and Apple. The same pattern is going to repeat itself for cryptocurrency.

That being said, we believe that more of these violent bull / bear runs are in due in the future. Understand that when the Internet was born, it was fostered by the U.S. Government, the U.S. Military, and many universities for years before it was released to the public. While some may have questioned the future of the Internet, there wasn’t fervent and vehement opposition, talks of regulation, and a cultural opposition as we see with crypto today. While many, like myself, equate the Internet and Cryptocurrency as being similar in nature and disruptive potential, cryptocurrency has had a much more violent beginning and it’s turbulent valuations reflect that.

Even still, corrections such as the one we’re in are very positive because they allow the market to shake loose the delimiting factors holding it back. Weak hands, scam and worthless ICOs, and systemic issues such as ponzi schemes like Bitconnect, poor exchanges like Bitgrail, and to a lesser degree fraudulent operations like Tether have all been addressed in some form.

This correction has been cathartic and has helped to solve many of the issues with the current state of crypto. Of course, not all issues can be solved, but with enough cleaning up the market will be ready for another bull cycle.

Specifically this week we saw positive developments for Bitcoin in the form of Segwit adoption by Bitfinex and Coinbase, positive developments for crypto as a whole in the form of Bank Of America considering crypto a business risk and South Korea supporting “normal” trading, and negative developments in the form of Venezuela’s oil-backed Petro cryptocurrency and hackers exploiting Tesla’s cloud systems to mine Monero.

Have a great week.

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • Entered ICON position

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • Exited PHR position
  • Exited XBY position

Current Portfolio

How to read this portfolio: Please click on the Chart Key tab above for definitions and color codes. The colors correspond to our 7 categories in the graphic below.

Tier 4

OriginTrail

OriginTrail enables seamless data sharing along any supply chain. The decentralized, blockchain-supported network protocol ensures trust, transparency, and security. It helps companies exchange relevant data seamlessly and in a secure way to build accountability, protect their brands and increase efficiencies.

Po.et

How do you take an open, trustless and decentralized system that anyone can write to at basically no cost and determine what information is useful, trustworthy or accurate? What’s to stop someone from copying a famous work, timestamping it to Po.et and claiming it as their own? How do you filter the “good” from the “bad”? Facts from “fake news”? The answers to these questions, these problems, can be crowdsourced by aligning economic incentives of content creators, publishers and curators via competing token-curated marketplaces, using the Po.et token — POE.

EVE

ITC

BIX

PFR

DNA

PHR

ICON

Tier 2

OMG

 Tier 3

REQ

SUB

LINK

NANO

ICON

Tier 4

BNTY

TAU

WISH

PHR

LOCI

HPB

XBY

 

How to read this portfolio: Ticker: Contains the ticker code for the coin. You can search this ticker in Coinmarketcap to learn more about the coin. The color denotes the risk tier by our evaluation. Dark Red = T1, Dark Green = T2, Dark Blue = T3, Light Blue = T4 (Colors in the Ticker column do not interact with the colors in the other columns) Cost Basis = Our average purchase price for this coin. Current price = The average price of the coin based on the exchanges it is listed on. Strategy = What we plan to do with this coin. Staking is receiving dividends for that coin. Master node is also staking, but with a higher return rate for having a (large) number of that coin. Stop = Our exit point, if it exists What do the colors mean? The colors in the ticker column represent the risk profile of that coin. The colors in the other columns reflect what sector(s) that coin belongs to. Some coins belong to multiple sectors, which is indicated by multiple colors. The colors correspond to our 7 categories in the graphic below

ReadySetCrypto’s 7 Categories Of CryptoCurrency

Tier 1 coins are those coins which we have considerable assets invested, are firm believers in the project direction and execution, and have very little reason to sell within short to mid term. These are coins which we risk evaluated to be very solid, and have a high probability of existence duration.   

NEO

NEO ($NEO) is classified as a Dividend and Platform coin. As our largest holding, we believe NEO has the potential to become a dominant smart contract and DApp platform in 2018. It’s four most compelling features are:

  • An innovative consensus algorithm which will allow for greater TPS (transactions per second) over its competitors.
  • A dividend structure for holders, incentivizing coin retention and network stability / diversity.
  • SE Asia location, enabling NEO to break into markets more easily than competitors.
  • Agnostic smart contract language, allowing for smart contract developers to use existing mainstream programming languages, which allows for cheaper smart contract implementation as compared to Ethereum who’s proprietary smart contract language, Solidity, can be a barrier to integration.

NEO is best acquired through Binance. Storing NEO on the Binance exchange will result in a GAS distribution once a month on the first. We recommend the NEON wallet for safe storage. GAS will be distributed on the NEON wallet daily.  

WaltonChain

WaltonChain ($WTC) is classified as a Dividend and Utility coin. Waltonchain is on the cutting edge of using RFID hardware to enable supply chain management 2.0. We believe Walton has the potential to become a dominant IoT blockchain solution Waltonchain is the only truly decentralized platform combining blockchain with the Internet of Things (IoT) via patent pending RFID (Radio Frequency Identification) technology. The custom RFID chips are able to digitally sign and verify transactions at the integrated circuit level, automatically and instantly reading and writing data to the chain without human intervention. This unique implementation of blockchain + IoT facilitates the true interconnection of all things in the real world with the virtual world, creating a genuine, trustworthy and traceable business ecosystem with complete data sharing and absolute information transparency. Walton has two major competitive advantages:

  • A recently confirmed (to be signed) partnership with China Mobile’s IoT Alliance. China Mobile is the largest mobile telecommunications service in the world as well as the world’s largest mobile phone operator by total number of subscribers. Walton’s Management system is set to be implemented through mobile communication networks, and China Mobile is the largest one. Waltonchain is positioning themselves to be the single connector of the entire Internet of Things initiative put forward by the China Mobile IoT Alliance.
  • They implement the blockchain through the RFIDs at the foundational layer. Their technology is patent-pending and gives Waltonchain a solid claim as the only blockchain that connects the physical world with the virtual world with truly reliable data. This is because all other IoT solutions tag items through API, and this means all the data is first passed through a centralized intermediate, a potential point of vulnerability.

Ethereum

Ethereum ($ETH) is an open blockchain Platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum – it is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications.

Tier 2 coins are those coins which have performed extremely well, we have a large amount of assets with, and we believe will continue to operate with high marks. What separates these coins from our Tier 1 status is a flaw or they haven’t yet proven their defining feature, though we believe they will.

OmiseGO

OmiseGO ($OMG) is classified as a Dividend and Utility coin. OmiseGO is a Southeast Asia-based company creating an e-wallet that will make transfer of assets and currencies possible. Merchants and users of the wallet can transfer whatever asset or currency they desire. For example, you could use your ethereum, bitcoin, international fiat, or even your airline points to buy groceries using the e-wallet app on your mobile phone. Transfers can happen across borders, or even while traveling abroad. Unlike Western Union or PayPal for example, the fees are almost negligible, and the transfer is instant. Because it’s based on a blockchain, there are no intermediary banks necessary and users don’t need bank accounts to access those funds. This is especially good for migrant workers who send money home and often don’t have bank accounts and are forced to use expensive wire services instead.

NAVCoin

NAVcoin ($NAV) is a Privacy coin with upcoming Platform features. NAVcoin has been around for 3 years. It is not minable, instead being based on a Proof of Stake system in which stakers earn 5% annual returns. Theoretically this means there could be 5% inflation on the supply, however, that would require every coin holder to stake, so likely there will be very marginal inflation between 1 and 3% year over year. It is a currency originally based off of Bitcoin version 0.13, which should tell you it’s got a good foundation from which to build its feature set. Being based off Bitcoin, it currently is a method of transaction, with notable upgrades in the form of Segwit (with possible lightning network integration in the future) and 30 transaction times with extremely marginal fees. That’s great but a lot of coins have that going for them, so thankfully we’re just getting started with the real interesting pieces of NAV. The first and currently only implemented feature, NavTech is a unique dual blockchain technology. Essentially, NAV runs on these two blockchains in order to completely disconnect the sending wallet (your wallet), to the receiving wallet (where the money is getting sent). Think of it like a VPN, NavTech completely strips the sender’s details so the transaction is completely anonymous. The anonymous transaction space has really gotten big lately, with Monero’s recent price action and Ethereum’s implementation of ZKSnarks being two big examples that come to mind.Moving on to the roadmap, there are two big upcoming features for NAV:

  • The first is Polymorph, which is a really cool blend of Nav’s anonymous transactions and Changeally’s instant exchange. What this means is that, for example, I wanted to pay someone in Bitcoin but I wanted to do it anonymously. Polymorph would take my bitcoin, turn it into navcoin in order to be processed and sent anonymously using the Navtech dual blockchain, then turned back into bitcoin at the to be sent to the receiving wallet. This will certainly set NAV apart, as it guarantees anonymous transaction for all of the coins on changeally. This is huge for exposure, and a great opportunity for NAVcoin to gain trust, which is absolutely critical anonymous transaction coins.  
  • The second big upcoming feature is ADApps, or Anonymized Decentralized Apps. This is also a huge potential win for Nav as there is already a huge amount of interest in the crypto space surrounding Dapps, such as Ethereum and Omni. Adding in the anonymous layer would attract projects that would value the anonymity. Nav is still in the planning stages for this project so it could still be awhile before it comes to fruition, but we should see the whitepaper for it soon, and if they could be first to market with ADapps that could prove to be a killer feature for them as it would give them first access to the interested demographics.

ICON

Simply put, ICON ($ICX) is a massive scale blockchain Platform that allows

  • Decentralized Application (DAPPS) – Build DAPPS on ICON Platform like on Ethereum and NEO. Yes, soon, you will see ICOs happening on ICON platform for different DAPPS
  • Interchain (Interoperability with Blockchains) – Allows different blockchains connecting to one another through their protocol. ICON is fully compatible with traditional blockchains like Bitcoin and Ethereum and in future can bridge other public blockchains such as Qtum, NEO and many others to achieve their mission statement – “Hyperconnect the world”
  • Artificial Intelligence (AI) – Use of AI to ensure all nodes contributing to ICON Republic/platform are rewarded fairly and not to have certain powers over distribution policies. AI will continue to learn a variety of variables to determine optimal distribution policies and achieve complete decentralization.
  • Decentralized Exchange (DEX) – ICON will integrate different DEX protocols on their platform to facilitate exchange of ICX and other future ICON platform currencies. Bancor protocol will be their first DEX protocol when mainent launches this month end and Kyber and others will follow. Not just throwing Kyber’s name out there, it was confirmed they are working with each other, official partnership yet to be announced.

Ripple

Ripple ($XRP) is a real-time Payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. The case for XRP comes down to the following: 1) Payment systems work best with bridge assets to focus liquidity. 2) There are good reasons to expect a cryptocurrency to be the most popular bridge asset. 3) There are good reasons to expect that cryptocurrency to be XRP.

  • Open, decentralized payments will have lots and lots of assets, including national currencies of all kinds and cryptos. A significant fraction of payments will be among assets that aren’t the most popular. Using intermediary assets to settle those payments concentrates liquidity and reduces spreads.
  • National currencies are always tied to jurisdictions and can’t be universal. Systems built around them will never be as open and inclusive as systems that aren’t.
  • XRP settles faster than any other major crypto. It higher transaction rates than other major cryptos. It is beat by others only by the amount of liquidity available today. And, most importantly, XRP has a company that is devoted to making sure XRP succeeds for this specific use case.

Tier 3 coins are those coins which we have moderate investments and we believe have a possibility of high performance in the future, but as of yet have not shown enough performance to reduce their risk profile. Tier 3 coins are coins which are moderately risky, but due to our risk analysis of the project and team we believe have minimal chance of failure. 
Tier 4 coins are coins which we have minimal stake in, are highly risky, and we are contributing no more than 2% of our portfolio to. These coins represent the outer fringe of our risk analysis, in that we have little information to work with, have little insight into the coin’s performance, and at the very best we are making an educated guess that they will be successful. If a coin performs well and proves that it has a commitment to its compelling feature, it will be moved to the Tier 3 status.  

Fundamental Currency Research

Of the top ten, we’re only seeing positive movement for IOTA and Litecoin. Volkswagen has recently announced cooperation with IOTA. The CDO of Volkswagen said at the Bosch Connected World 2018 Conference: “One of the companies playing a big role in this, that BOSCH is partnered up with, that we (Volkswagen) have partnered up with is IOTA”. He also says the tangle (IOTA technology) has a lot of advantages over Blockchain (“feeless, offline transactions, quantum secure”) and “we are investing in this, we are working on this, this is a future technology”. IOTA is by far one of the most exciting projects in the top 10, but it also has many challenges to overcome. Its technology, the Tangle, is a Blockchain alternative that does promise some very compelling features over the older consensus mechanism. We are still skeptical that they will be able to solve the massive challenges facing them soon, but cooperation initiatives like this one do bolster our confidence. Litecoin on the other hand is raising in response to Litepay being released tomorrow. According to the website itself, “Use LitePay’s retail, ecommerce, billing, and donation tools to accept payments from customers anywhere on earth. Receive settlement from Litecoin payments directly to your bank account in your own currency, with zero price volatility or risk.” “This is the very beginning of a new way of sharing and transferring value,” said Litepay CEO, Kenneth Asare, “This is the first part of a very long road that goes from 300 million people being able to be banked to everybody with a cell phone being able to be banked, which is literally 5 billion people today.” If Asare’s venture is able to mold Litecoin into something useable and more importantly akin to fiat currency, we could see a very bright future ahead for the coin. On the other hand, success is about adoption, and convincing people they need this, especially if they do not have a bank account, will be a steep challenge.

  We’ve hit the stops we set for our new positions in Phore ($PHR) and Xtrabytes ($XBY). Phore rebranded this weekend to Phore Blockchain so we anticipated there might be some “buy the rumor, sell the news” and to a degree there was as it dropped after the announcement, but then recovered. As such, we’ll set an entry just below our exit to re-enter at a better price because we saw a good direction being set by the team at their event. We’ve re-entered ICON ($ICX) about 20 cents below our exit, which means we’ve effectively expanded our position simply by strictly playing stop losses. Several of you wrote in asking why we exited a position we seemed so bullish on and that’s a great question. We exited ICON because of price action, not because we had determined any lapse in fundamentals. ICON is a relatively new coin with a very large, ambitious project, and as such people who got in during December and January may have become disillusioned with the long term prospects of the coin given its slow price movement and lack of updates following their Jan 26 summit. The fault in that analysis is that platforms are some of the most complex projects in crypto, and as such they are some of the slowest to development. Any investment in a platform type crypto needs to have a good horizon or you will be disappointed. Take Ethereum for example. The updates for the #2 coin are infrequent and the announcements are not “exciting”. One of Ethereum’s biggest updates last year did not make any front end changes and as such the price dumped after it was updated, even though the technology had improved. The biggest “sexy” updates for Ethereum are likely two years away, so clearly patience is the virtue needed to invest in the “infrastructure” coins. The payoff is that they are some of the most solid coins out there, as we’ve seen Ethereum and NEO, for example, weather the storm better than most. ICON still needs to prove itself to many investors before it can have similar results.

        In this section we’ll feature a daily ICO or new coin we think you should check out. Based on your country, you may not be able to participate in the ICO, but you will be able to trade the coin once it is listed on an exchange following its ICO (usually only a couple of weeks). ICOs are where a lot of money in crypto is made. Here’s proof.   That said, we should warn you: ICOs are highly risky endeavours and you need to mitigate any potential losses. Treat it as money you’ve lost the moment you contribute to the ICO. We are not responsible for the ICO’s performance. Today’s featured ICO / New Coin is:

VinChain

For flipping Neutral.

For long-term holding Good.

What is it? 

VinChain is creating a worldwide decentralized database of vehicle information that is 100% transparent, reliable, and accessible by everyone. This database is blockchain based, which will guarantee that the information in it has not been faked, changed, or deleted. The blockchain guarantees full transparency and builds trust in the system. Information is captured from country registries, insurance and leasing companies, different partnered services, private registers, paid APIs, and certified members. Information is also captured directly from the vehicle, so the data is live and updated in real time.

What is our verdict? 

What we like: Previous experience and good use case.

What we don’t like: Needs a lot of adoption to be successful, and may have a hard time selling blockchain benefits.

  • 48 days
Token
VIN
Price
1 ETH = 20,000 VIN + stage bonus
Bonus
Available
Bounty
Available
Platform
Graphene
Accepting
ETH, BTC, LTC, DASH
Soft cap
3,300 ETH
Hard cap
23,250 ETH
Country
USA
Whitelist/KYC
KYC

Website: https://vinchain.io/

Whitepaper: https://vinchain.io/files/VinChainWhitePaper.pdf

Technical Analysis Research

We currently have a price “frame” where we can make a call as to whether the current “bounce” and short-term uptrend would fail and fail back into a “lower high” and a continuation of the Bear….I’ll discuss that in our video segment today.   I did bring up this topic previously when it looked bleak, and I’ll put more structure around it in the coming days – scalping or day swings. The reason for bringing this up is because most everyone out there is long-only, and in a corrective/bear market, your options are either to hodl and hunker down, to try to find a needle in a haystack with a new coin that’s as of yet unaffected by the bear……or you can simply look for short-term opportunities to trade in and out.   Yes, I’ve heard it all before, that “markets are efficient” and that “you can’t time markets” and these statements are usually made by people with little actual charting experience, or by those that lose the first trade out of the gate and and “one and done.” I believe that there are short-term edges that you can find in markets during dull times like these, and a good, tightly-run system might allow one to build up their capital while they wait for the next accumulation phase.   Here are the elements that I think that one needs to successfully participate in short-term swings:

  • Instrument/Asset to Trade: What you’re trading needs to be liquid enough that your position is just a drop in the pond.
  • Timeframe: The timeframe that you’re going to trade needs to match your temperament, your available time, and the opportunities available.
  • Fees: minimizing net fees is important to achieve a net positive profit factor.
  • Entries: you must define clear, non-negotiable entries with transparent, easy-to-follow rules.
  • Exits: must be defined at or before your entry so that there is no guesswork.
  • Tracking/Analysis: a huge part of any system, it must learn from errors/mistakes/losses to determine if there is a root cause behind the loss.
  • Start small: My preference is that you start these trades with the minimum possible position size, and only through demonstrated performance should you start to lever up to even a fraction of a percent of your account size.

  In today’s video I’ll show some hard-right edge analysis to look at a potential strategy that we can trade. I will begin some trial trades this week, and if there is enough interest I might consider placing these trades in the telegram group.   Another alternative to this process is to use “profit trailer” with Binance/Bittrex/Poloniex. This is automated system trading. I have tried this before and I found that it’s highly dependent on the trader being able to detect and “tune” strategies to be able to fall in with the current character of the market. There are no silver bullets in any market, folks. Again, if there is sufficient interest I will purchase a license and experiment with this tool, however my preference is going to be with the discretionary trades first.

If you go to buy the course at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto..

  will not place much emphasis on Altcoins right now while markets are still working out the eventual bottom.

    I am doing the majority of my Technical Analysis work on TradingView and Coinigy, and I have a BitFinex app on both my iPad and Android smartphone. All of these charting platforms call a TradingView API. TradingView is the 800 lb. gorilla in the Crypto charting space until the “established” players want to make a go at Crypto, like Ninjatrader, Tradestation, eSignal, Sierra charts, etc. My sense is that TradingView has such a head start that it will be very difficult for the big boys to make a dent in this space for a while. Until that point, TradingView has almost a monopoly in this space. If you have a particular tool that you think is superior, please let me know.   You can access the BitFinex and TradingView platforms for free, however there are some paid features that you might want to consider depending on your needs, such as expanded watchlists, different study sets, account alerts, etc.

  Coinigy is a great tool for determining prices on each exchange, however I may not have access to the full suite of tools on TradingView charts. I am currently not using it as a front-end GUI for my exchanges, which it supports.I also use Blockfolio to give me a quick snapshot of my holdings, and find that it does an excellent job to aggregate all of my holdings into one easy-to-read snapshot of my cryptocurrencies, which are typically located in many different places.

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